Chairman of Committee of European Securities Regulators: Harmonisation of EU financial supervision is "moving ahead at full speed";

"The autonomy of national supervisors will steadily be reduced"

In an interview with Belgian business magazine Trends, Eddy Wymeersch, Chairman of the Committee of European Securities Regulators (CESR) - one of the committees that will be upgraded to a full EU authority with binding powers under the Commission's draft plans for more financial supervision - said: "In future we will no longer give advice, but we will impose binding rules". He said, "In the long term there will be gradual harmonisation [of EU financial supervision]" and that "the autonomy of the member states will steadily be reduced". He also argued that "contrary to what the newspapers claimed, the British weren't opposing [the proposals]. They only had reservations about giving the new authorities decision-making powers, which could have an impact on the national taxpayer". He concluded saying: "the harmonisation of supervision of the EU's financial sector is moving ahead at full speed. In September 2009 the European Commission will submit its actual proposal. By the third quarter of 2010 the supranational authority has to be operational."

Open Europe last night held an event in London to discuss the EU's proposals for financial regulation and supervision in the wake of the financial crisis.

David Green, Advisor on International Affairs to the Financial Reporting Council, opened the debate by suggesting that "There is currently a divide between euro area banks and non-euro area banks. There is no place where the chairman of the FSA and the ECB can meet". He suggested that "The [European] systemic risk board will provide for the first time a platform for a proper debate" but warned that the UK would have the same voting strength on the board as smaller countries. He also said there was "a disturbing feature in the voting system...It should be evenly weighted between euro area banks and non-euro area banks".

Mark Hoban MP, Shadow City Minister, argued in his speech that "the Treasury and the Government took their eyes off the ball in the first part of this year", adding that "we needed robust, early engagement from the government" whilst "discussions were taking place in Brussels which were going to set the tone for regulation not just for the next few months but for years". He added that "unfortunately we have now lost the right to be heard about the direction of regulation".

Dr David Doyle, Senior Advisor at the Brunswick Group, confirmed that the three new EU authorities would get legal powers to override national financial authorities. He said that the new EU bodies would address the problem of member states interpreting and implementing EU laws in different ways. He argued that upgrading "these committees into full fledged departments with legal powers to investigate, sanction, to ensure EU application and regulation of the legislation" would be an important step to solve such diverging interpretations, but denied that such a move would lead to losses of national sovereignty.